Contrary to what many think, the fashion industry is not a frivolous, vain or transient sector. Personally, clothing conveys personality, and historically even social and spiritual information. For the economy, it is a pillar in the creation of jobs and income.
Worldwide, the industry is estimated at $3 trillion. In the UK, fashion is worth £26 billion to the economy. It is the world’s second largest economic activity in terms of trade intensity, employing more than 57 million people in developing countries, 80% of whom are women.
Isolation as a driver of market movements
During the pandemic, with strict restrictions on face-to-face contact, the segment boosted online sales in Brazil. Despite closing brick-and-mortar stores, many of these companies have been able to find another opportunity to maintain or increase e-commerce revenue.
Social isolation ended up being an accelerator for various trends and market movements, as fashion had to rehearse changes and strategies in a short period of time that, in a normal and safe scenario without a pandemic, would have taken most brands years.
With the gradual return to normal life, this year the sector shows lower growth compared to the boom of 2020 and 2021. The Brazilian Electronic Commerce Association (ABComm) estimates that fashion revenue in the first six months of this year amounted to R$ 6.5 billion, representing growth of approximately 2%. A modest increase compared to 2021 to 2020, which was almost 20%.
Return to normal life = slower growth
Some factors explain this data, such as: lower overall e-commerce growth in 2022, which was approximately 5% in the first half, when more than 6% was expected; the increase in fuel prices, which increased the cost of transportation, and if we consider that the category of fashion and fashion accessories has an average fare below R$ 200 reais, transportation can represent 5% to 10% of the value of product delivery.
Another factor was the price of the raw material, in this case cotton, which increased by 41% in 2021. If that’s not enough, there is a GDP growth forecast of just 1.5% for 2022, which is still not enough to recover the category in the pre-pandemic period.
According to industry associations, this year’s growth could be around 1.1%, taking into account traditional retail plus online sales. It is estimated that e-commerce can represent about 6% of the sales of fashion products and accessories.
security of purchase
Regarding the quality of service, the segment has invested a lot in the security of purchase, solving the problem of replacement with longer deadlines, beyond what is determined by the Consumer Code, with the possibility of replacing many products in physical stores.
We see, for example, in Reclame Aqui that large retailers in the segment try to solve all problems and have ratings above 8, on a scale of 10, which shows commitment to customers.
Fashion is a sector that is completely connected with creativity and through it the market wants to heat up.
Social media has always played a very important role in marketing and branding strategies for brands in the fashion industry. During the pandemic, it was no different, especially with the popularization of Tiktok in Brazil. Today there is a strong fashion movement on social networks of the moment with known “trends”. Digital influencers promote products by trying on clothes and accessories, not to mention promotions offered to brand followers.
The use of marketplaces has also boosted sales, as stores can use the entire structure set up by major players to offer their products, paying commission on sales.
In addition to the sale of new products, the sector is growing in a circular economy. Companies like Arezzo, Renner and C&A invest in companies that resell used products, with the goal of serving a public that is interested in a sustainable economy. This market may already represent approximately R$ 1 billion in Brazil.
Reinvented, redefining goals and strategies and using its creative essence, the fashion sector seeks to support its recovery and its fundamental role in the economy of Brazil and the world.
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